The Fundamental Law of Road Congestion: Evidence from US Cities
Abstract
We investigate the relationship between interstate highways and highway vehicle-kilometers traveled (VKT) in US cities. We find that VKT increases proportionately to highways, confirming the 'fundamental law of road congestion.' The elasticity of VKT with respect to lane-kilometers is approximately 1.0 in the long run.
★ Curator Summary
This paper is the empirical anchor for the Service Demand Rebound Model. Duranton and Turner proved what transportation planners suspected for decades: building more highway capacity doesn't reduce congestion because it induces proportional new demand. The elasticity of ~1.0 means every 1% increase in capacity generates 1% more travel. The parallel to service operations is direct: making it easier to contact support doesn't reduce contact volume — it creates proportional new demand from previously suppressed inquiries.
Why It Matters
When your vendor promises that AI will deflect 40% of contacts and save 40% of headcount, this paper explains why you'll likely see only 25-35% actual savings. The induced demand mechanism is the same: reducing the 'cost' (effort, wait time) of contacting support activates latent demand. The short-run vs. long-run elasticity distinction is critical for planning: Year 1 rebound is modest (ε = 0.3-0.5), but by Year 3 it approaches 1.0 as customer behavior fully adjusts.
Caveats
This is transportation research, not service operations research. The analogy to contact centers is strong but not formally proven in that domain. Service demand elasticity may differ from travel demand elasticity in magnitude. The paper studies US cities specifically — cultural and infrastructure differences may affect generalizability.
Discussion
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